Kingdom of Saudi Arabia finally agrees to host Bangladesh banks
The Saudi government finally allows Bangladeshi banks to open branches over there to facilitate sending home remittances by expatriates, officials said. Many bankers, however, say they would have to face tough competition with global leading banks in the Kingdom of Saudi Arabia (KSA). It has happened after long persuasion by the government and the Bangladesh mission in Saudi Arabia, he added. The Bangladesh mission in Riyadh most recently sent a letter to the foreign secretary for taking necessary action in this connection, he also said. The embassy of Bangladesh in the Saudi capital would like to suggest the authorities concerned to convince the interested Bangladeshi banks for submitting their applications for licenses to set up their branches in Saudi Arabia without further delay, according to the letter. Two high-powered teams of Saudi Arabia will visit Dhaka in the current and next month on different purposes. Discussions on the interested bank branches’ licensing to operate in KSA will be held on priority basis, said one official. Private bankers think that setting up bank branches in KSA will be a challenge for the private or state-owned banks. Because, any bank branch can’t survive there through collecting remittance, they have to do other banking services, a senior banker said.
Janata Bank struggling with restructured large loans
State-owned Janata Bank is struggling to recover the large loans it restructured under a Bangladesh Bank special policy last year. Under the policy, Janata has rescheduled BDT 52.7 billion in loans. Some of the clients’ repayments matured in June this year but not all of them were able to pay the due instalments. The bank retrieved BDT 3.3 billion out of BDT 4.4 billion due from the restructured loans in June, said Managing Director Abdus Salam. Clients who have failed to pay their instalments in June have until September to do so, after which they will once again become defaulters, he said. Of the Janata’s restructured loans, the highest amount has been of Beximco Group’s, of BDT 19.6 billion. But the group’s repayment will mature in September and if Beximco fails to pay the bank by December, the loans will slip into bad debts again. In a major move last year, the BB allowed defaulters of large loans — BDT 5.0 billion and above — to reschedule their debts on the ground that they were affected by ‘various external and domestic factors beyond their control’.
Overseas jobs jump 52.0% in H1 as Oman leads hiring
Led by Oman, the country’s overseas employment grew by more than 52.0% in the first half (H1) of year compared to the same period, the government data said. Some 372,895 Bangladeshis got overseas jobs in January-June of 2016, whereas 244,239 went abroad in 2015, according to the official statistics of Bureau of Manpower, employment and Training (BMET). The bureau figure showed that Oman, Qatar and Saudi Arabia hired a significant number of workers, including domestic helps from Bangladesh in the first six months of current year. Oman recruited some 102,320 workers, Qatar 67,705 and Saudi Arabia employed 57,279 from Bangladesh in the first half of the year. During the period, 70,492 women secured jobs overseas. Of them, more than 40,000 went to Saudi Arabia with housekeeping jobs. The recruitment from other countries like Jordan, Bahrain, United Arab Emirates (UAE) and Singapore remained as usual like earlier.
RMG makers want 0.7% tax at source as final settlement
The country’s apparel sector has urged the government to fix 0.7% tax at source on export as final settlement instead of making it just minimum rate. Bangladesh Garment Manufacturers and Exporters Association (BGMEA) made the call in a letter to Finance Minister AMA Muhith on July 16. BGMEA President Siddiqur Rahman sent the letter to the finance minister. The rate was earlier reduced to 0.7% from 1.5% in the proposed budget. If the tax at source of 0.7% is considered as minimum tax, there are possibilities of imposing other higher taxes and there are also possibilities of harassment to entrepreneurs which will make the income tax return submission process more complex, it added. Urging the Finance Minister to intervene into the matter, BGMEA President in his letter has also requested him for giving necessary instructions to the National Board of Revenue (NBR) for amending the income tax ordinance and issue necessary rules to consider tax at source on export for the apparel makers as final settlement which the RMG makers enjoyed before. The apparel makers have so far enjoyed tax at source on export as final settlement. However, the FY17 budget turned 0.7 tax at source on export as minimum tax. During the last fiscal year, the RMG makers were enjoying 0.6% tax at source on export, which was considered as final settlement.
US cotton shipment to Bangladesh might double in five years
The United States is aiming to double its cotton exports in Bangladesh in the next five years, representatives of a US body have said. Bangladesh’s apparel industry is expected to grow at an average of 12% in the coming years, while keeping up with that pace, the demand for cotton will annually increase at a rate of 10%, said the representatives of ‘Cotton USA, the non-profit body which promotes U.S. cotton fiber and manufactured cotton products around the globe. Currently, the US exports 160,000 bales of cotton each year. However, it wants this exports to double in the next five years as the local demand for better quality cotton increases, they said during an interview. The three-member ‘Cotton USA’ delegation in Bangladesh is led by the President of Cotton Council International Keith Lucas and also includes its Executive Director Bruce Atherley. The US delegates’ remark comes at a time when Bangladesh has just become the largest cotton importer in world, partly thanks to China’s cotton stockpiling program. Last year, Bangladesh imported 6.10 million bales cotton, of which 2.99 million bales or 49% came from India. With nine million bales of overseas shipment in the year 2015-16, the United States stands as the largest cotton exporter in the world.
Gulshan massacre tears at fabric of garment sector
Bangladesh relies on garments for more than 80 percent of its exports and roughly 4 million jobs. It ranks behind only China as a clothing supplier to developed markets in Europe and the United States. But the 1 July attack has confronted the industry with its biggest image crisis since the collapse of the Rana Plaza factory building in 2013, with some fearing security worries could cripple a sector that is the lifeblood of the economy. Foreign companies, including Japan’s Uniqlo, have suspended all but critical travel to the country since the attack, although there are no signs yet of big players moving orders elsewhere. The government says it has stepped up security for foreign business travellers, investors and diplomats.
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